If you are selling online to consumers (not businesses) – you need to take note.
From 13 June 2014, the law is changing and if you don’t comply then there will be wide-ranging and serious repercussions for your business.
There is a lot of information below. If you don’t have time to read and digest it all, scroll down to the bottom of the page to see the easy options for you to comply.
Under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, the law has changed so that:
- the cooling off period will be extended from 7 days to 14 days. If you fail to advise your customers of this and don’t provide the correct form of cancellation, the customer has the right to return the goods for a period of up to 12 months plus 14 days. This could be catastrophic if you have fast moving product lines.
- you can only charge the customer for return delivery on cancellation of a contract if you have made this clear in your terms. Otherwise you must pay the cost of return delivery.
- all payments received from the customer must be refunded upon cancellation, apart from you may deduct the amount of any diminution in value of the goods as result of the handling of the goods by the customer. A customer is allowed to handle the goods in the same way you might do in a shop (so for example using a toaster and returning it so that crumbs are in the bottom would be one step further than that and you would be able to claim for diminution in value). This right to claim for diminution in value will be lost if you fail to inform the customer correctly of his rights to cancel.
- refunds must be provided within 14 days after the day on which you receive the goods back or if earlier the day on which the customer supplies evidence of having sent the goods back and must be by the same method by which the customer paid (unless they agree otherwise).
- if the customer cancels the contract, you must reimburse all delivery costs except where they have chosen a higher level of delivery in which case you only need to refund them the costs of your least expensive delivery service.
- all goods must be delivered within 30 days unless the consumer agrees otherwise. If the goods aren’t delivered within 30 days and the delivery within that time was essential (taking into account all the circumstances or as advised by the customer) the customer may treat the contract as at an end and you must without undue delay reimburse all payments to the customer. If you don’t deliver goods within 30 days and the timing was not ‘essential’ the customer may contact you to require delivery within a certain period. If you do not deliver within that period, then they may treat the contract as at an end and you must reimburse them all payments.
- it needs to be clear that there is an obligation to pay. All your ‘checkout’, ‘order now’ (or similar) buttons need to be changed to ‘pay now’ or some other wording making it clear that there is a commitment to pay. If this is not provided, the consumer is not bound by the contract or order and can ask for a refund.
- key points of the contract (such as the main characteristics of the product or service, the total price and how to terminate) have to be provided in a “clear and prominent manner” directly before your customer places an order.
- you must set out “clearly and legibly” and at the latest at the beginning of the ordering process whether any delivery restrictions apply and what means of payment are accepted.
- the express consent of the customer must be obtained before taking any additional payments. So if for example you pre-tick the option for a gift box, this will be in breach of the new regulations.
- only providing customers a premium rate telephone number to contact you will be in breach of the new regulations and they can claim reimbursement for the difference between the premium rate and a basic rate call.
- there are new rules on the supply of digital content.
- contract terms must be confirmed to the customer in a durable medium by no later than delivery of the goods. A “durable medium” includes an email but there must not be a link to terms on your webpage as these can change. Instead you must save the current terms as a PDF and send this to the customer (or you can print them and put the printed terms in with the delivery).
If you don’t currently have terms of business and a form of cancellation that reflect this, you should put these in place as soon as possible.
You also need to change your order buttons to “pay now” and ensure you are providing the requisite information at the relevant places.
I can help in three ways:
- you can watch my 3 part training on the new Consumer Contracts Regulations – without charge – just click here to register your interest and we will send you a link to the training.
- you can purchase my e-commerce terms and form of cancellation – for just £97 – click here to order
- I can draft you bespoke e-commerce terms and provide you with the form of cancellation for £695 plus VAT
If you would like help with bespoke terms, get in touch with us through the Contact Us page and we will be in touch to help you just as soon as we can.
© Suzanne Dibble 2014
Disclaimer: The information contained above and in the free training series is based on English law only and is provided for information purposes only. The contents of this article and the free training series are not intended to amount to advice and you should not rely on any of the contents of this article or the free training series. Professional advice should be obtained before taking or refraining from taking any action as a result of the above contents or the contents of the free training series. Suzanne disclaims all liability and responsibility arising from any reliance placed on any of the contents of this article or the training series.